An Alternative to Long Term Care Insurance
If you haven’t purchased long term care insurance up until now, why haven’t you done so?
In most cases, if you really boil it down, it’s because you can’t stand the thought of paying all of those long term care insurance premiums and never collecting on the benefits if you don’t get sick and require care.
If that’s true for you, I don’t blame you. It is a significant amount of money to part with.
However, if you haven’t bought long term care insurance, 100% of the financial risk still sits in your lap.
If you or your spouse gets sick, there are two alternatives:
- You pay for care out of your pocket, thus draining your Retirement Bucket™ for your healthy spouse, or
- You qualify for Medicaid and the government pays for your care. However, in order to qualify, you have to spend or give away everything you have (except $2,000), and be without anything for five years in order to qualify.
Neither of those options sounds too appealing.
A New Alternative
To combat this roadblock to purchasing coverage, several insurance companies have gotten creative and developed an alternative: a combination life insurance and long term care insurance policy.
The reason this is attractive to some is if you never claim long term care insurance benefits, you can either claim a cash surrender value in the policy, or your heirs are guaranteed a tax free death benefit greater than the premiums you’ve paid over your lifetime.
Essentially, this is a permanent single premium life insurance policy that is guaranteed to pay your heirs a benefit at your death.
However, the new wrinkle is you can also use it to get reimbursed for expenses related to home health care, assisted living, or a nursing home.
What this essentially does is provide protection against the threat of long term care expenses while guaranteeing that you or your heirs will get a return on your premiums paid.
Not a bad alternative!
The mechanics of these policies vary between companies. However, you are essentially paying a one-time premium for the plan.
In return, you receive a pool of money that you and/or your spouse can tap into for long term care expenses.
Whatever benefits are not claimed during your lifetime are paid out to your beneficiaries at your death.
If you’ve been thinking about long term care, but you haven’t been able to pull the trigger on coverage, perhaps this is the answer for you.